Issue while using Apache Velocity with servlets

I am quiet new with servlets and on top of that i have been trying to implement Apache Velocity for some template rendering. Below is the code i have written to implement velocity. String "ch " stores the value from the UI and prints it on the server logs. I have trying to read the template file KCIJPCFG.vm which is under the "C:" directory and replace the occurance of ${GBL_TARGET_HILEV} in the template file wth "TDITNT.ITM62242". I am able to run the following code when its a simple java code, but i am having issues when trying to implement it as a servlet. Help is appreciated.

The question i have:-

1. when i do System.out.println( writer.toString() ); i dont see any output on the server logs.
2. Does my code looks correct?